Rupee rises seven paise to close at 83.38 against U.S. dollar

Rupee gains against dollar on foreign fund inflows, oil prices, and dollar demand, expected to trade with slight negative bias.

The Rupee appreciated seven paise to settle at 83.38 (provisional) against the U.S. dollar on June 28 backed by renewed foreign fund inflows.

Forex traders said the strength of the American currency in the overseas market, elevated crude oil prices and the U.S. dollar demand from oil marketing companies capped sharp gains for the local unit.

At the interbank foreign exchange market, the local unit opened at 83.42 and hit the intraday high of 83.36 and a low of 83.49 against the greenback during the session. It finally settled at 83.38 (provisional) against the dollar, registering a gain of seven paise from its previous close. On June 27, the Rupee appreciated 12 paise to settle at 83.45 against the U.S. dollar.

According to Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas, Rupee gained to 83.3750 earlier in the day on boost from inclusion of Indian bonds in the JP Morgan's emerging markets bond index. However, a positive U.S. dollar and a rise in crude oil prices capped sharp gains.

"We expect the Rupee to trade with a slight negative bias on the strong U.S. dollar and a surge in crude oil prices. Dollar demand from oil marketing companies (OMCs) and importers may also weigh on the Rupee," Mr. Choudhary said.

Mr. Choudhary further noted that fresh foreign inflows and positive tone in the domestic equities may support the rupee.

"Traders may take cues from India's fiscal deficit data. Traders may also take cues from core PCE price index, personal income and Chicago PMI data from the US. USD-INR spot price is expected to trade in a range of ₹83.20 to ₹83.80," he said.